Parents

12/06/2012

Discussing retirement
and elder care planning with aging parents can be difficult for all parties
involved. For many parents and adult
children, these conversations can be awkward and potentially emotional. A recent study by Fidelity Investments
documents the extent to which the two generations are failing to communicate on
this topic, as conveyed by Forbes in
an article titled “Generations Apart: Talking Retirement And
Estate Planning Over Turkey.”

According to
the study, 89% of families agree that health and elder care discussion are important. But only 10% of adult children believe the
conversations they have had with their parents have been “very detailed.” Similarly, only 19% of children say the same
about estate planning conversations, and only 11% of adult children feel they
have discussed retirement readiness with their parents in detail.

There are
several implications of inadequate discussions.
For example, nearly 25% of adult children believe they will have to help
their parents in retirement while nearly all of the parents in the study said
they will not need financial help from their children. Similarly, some adult children underestimate
the value of their parents’ estates by more than $100,000. On the other hand, however, some adult
children may not save enough because they expect a large inheritance from their
parents. For more on this matter, you can consult the article “Parents and Adult Children Not in Sync as
Many Families Still Struggle with Financial Conversations” on Fidelity.com.

To help facilitate these
discussions, Fidelity also offers conversation starters on their website. However, an easier way to facilitate the
conversation may be for both the parents and the children to sit down with the
parents’ financial adviser. Advisers can
structure those conversations to keep focused on the essentials and keep the
emotions out.